National Labor Relations Board Continues to Limit Handbook Rules

HR BallThe National Labor Relations Board has been increasingly active in reviewing rules for employee conduct described in personnel policy manuals and handbooks. The NLRB focuses on Section 7 of the National Labor Relations Act, which guarantees employee freedom of speech and concerted activity with respect to wages, hours and conditions of employment. The NLRB examines handbook rules to determine if they could reasonably be construed by employees to restrict Section 7 rights. The NLRB’s determinations are applicable both to union and non-union employees.

Recently, the U. S. Court of Appeals for the District of Columbia Circuit affirmed the NLRB’s challenge to three rules promulgated by Hyundai America Shipping Agency, Inc., but upheld a fourth rule.

The first rule concerned investigative confidentiality, and prohibited employees from revealing information about matters under investigation by Hyundai. The NLRB held and the Court agreed that a blanket confidentiality rule clearly limited employees’ rights to discuss their employment. The Court acknowledged the importance of confidentiality in sensitive investigations, such as sexual harassment allegations, but decided that Hyundai’s rule was too broad and undifferentiated. Confidentiality in the context of a particular investigation or particular type of investigation could still be protected.

The next rule limited the disclosure of any information or messages from the company’s electronic communications systems. The Court agreed with the NLRB that such a broad rule could restrict the employees’ right to share information about terms and conditions of their employment. A more narrow rule restricting use of information about customers, business operations, or other employees would be acceptable as not open to interpretation as a ban on an employee’s discussion of the terms and conditions of his or her own employment.

The NLRB and the Court also invalidated a rule against performing activities other than company work during working hours. The NLRB for many years has distinguished between “working hours” and “working time.” Working hours is interpreted as the entire period from the beginning to the end of a shift, included meal time and other breaks. Restrictions on union activity or other concerted activity during working hours are presumptively invalid; similar restrictions during working time are not. Again, this rule was too broad and imprecise.

However, the Court decided that a handbook provision which encouraged employees to bring complaints to their superiors or to human resources through an open door policy, stating than complaining to fellow employees cannot resolve problems, was not too restrictive. The rule urged use of the company’s complaint procedures, but did not prohibit employee speech. Nor were there any penalties for complaints to fellow employees. The Court held that a reasonable employee would not view the rule as prohibiting Section 7 rights.

The obvious theme is that broad prohibitions invite scrutiny, whereas more carefully designed restrictions can be justified as reasonable. Personnel policy manuals and handbooks should be reviewed periodically with this guidance in mind.